Will the earthquake in Japan impact the scrap markets in short term?

While discussions regarding the possible effects of the political turmoil in the Middle East on the steel markets still continue, since last week the likely impact of the earthquake in Japan has also started to feature in such discussions. In the meantime, Turkish steel producers are not currently active in concluding new scrap purchases.
 
Last week's ex-Canada scrap bookings in Turkey have caused ex-US scrap prices to appear less reasonable. Turkish mills' ex-Canada scrap bookings for up to 200,000 mt last week at $460-462/mt CFR, including HMS I, shredded scrap and P&S scrap grades, have prevented the Turkish steelmakers from paying $465/mt CFR for ex-US HMS I/II 80:20 scrap. This week, ex-US HMS I/II 80:20 scrap offers to Turkey still stand at $465/mt CFR.
 
SteelOrbis has learned that, in the latest ex-Europe scrap booking in Turkey, the transaction price for 25,000 mt of scrap, including 22,000 mt of HMS I/II 80:20 scrap and approximately 3,000 mt of ex-Belgium shredded scrap, was at $443/mt CFR. This price level seems quite reasonable as compared to alternative ex-Europe scrap offers, since another scrap supplier is currently offering ex-Europe HMS I/II 75:25 scrap to the Turkish market at $445/mt CFR.
 
SteelOrbis has further learned from market sources that ex-Black Sea A3 scrap offers to Turkey stand at about $450-455/mt CFR, while transactions are being concluded at $447-450/mt CFR Marmara and at $450-452/mt CFR Nemrut.
 
While the political upheaval in the Middle East is still in progress, the massive earthquake in Japan is now also impacting the world economy. Although the possible effects of this disaster on the steel markets are being discussed, no clear consequence has yet been detected. The first scenario suggests that in the short term coking coal and iron ore prices will decline, also pulling down scrap prices. In the meantime, a second view suggests that, since Japan is one of the most significant scrap suppliers in the Far East, the interruption of the scrap flow from Japan will lead South Korean, Chinese and Vietnamese buyers to head to the US scrap market, raising the demand for ex-US scrap and eventually causing ex-US scrap prices to strengthen in the Turkish market. Finally, according to a third scenario, even if scrap demand rises, the anticipation of a decline in iron ore prices will also prevent scrap prices from increasing. These scenarios are discussed as regards the possible short-term effects of the earthquake. However, in the medium term scrap supplies from Japan are expected to rise.